Conn. Gen. Stat. § 12-815a: Vendor, affiliate, lottery sales agent and occupational licenses. Exemptions. Delivery services. Suspension, revocation, refusal to renew or placement of conditions on license. Compliance by licensees. Provisional authorization for occupational license applicant. Incidents involving lottery gaming system. Regulations. Fine and civil penalty.

(a) The Commissioner of Consumer Protection shall issue vendor, affiliate, lottery sales agent and occupational licenses in a form and manner prescribed by the commissioner and in accordance with the provisions of this section.

(b) No person or business organization awarded a primary contract by the Connecticut Lottery Corporation to provide facilities, components, goods or services that are necessary for and directly related to the secure operation of the activities of said corporation shall do so unless such person or business organization is issued a vendor license by the Commissioner of Consumer Protection. For the purposes of this subsection, “primary contract” means a contract to provide facilities, components, goods or services to said corporation by a person or business organization (1) that provides any lottery game or any online wagering system related facilities, components, goods or services and that receives or, in the exercise of reasonable business judgment, can be expected to receive more than seventy-five thousand dollars or twenty-five per cent of its gross annual sales from said corporation, or (2) that has access to the facilities of said corporation and provides services in such facilities without supervision by said corporation. Each applicant for a vendor license shall pay a nonrefundable application fee of two hundred fifty dollars.

(c) (1) The Connecticut Lottery Corporation may employ the delivery services of a business organization that does not hold a vendor license for the purpose of transporting and delivering lottery tickets to lottery sales agents, provided:

(A) All lottery tickets are securely packaged in tamper-evident packaging by employees of the corporation on the premises of the corporation while under video surveillance, the exterior of such packaging does not contain any word, graphic or symbol indicating that such packaging contains lottery tickets and the corporation does not include the word “lottery” anywhere on such packaging, including in the return address;

(B) All packages are tracked and require a signature upon delivery;

(C) The corporation creates and retains documentation for each package, which documentation includes, at a minimum, the following information: (i) The lottery game number; (ii) the pack number or numbers; (iii) the lottery game name; (iv) the number of packs contained in such package; (v) the name and address of the lottery sales agent who is the intended recipient of the lottery tickets; (vi) the package shipment date; and (vii) the name of the business organization delivering the tickets from the corporation to the lottery sales agent.

(2) Prior to utilizing a business organization described in subdivision (1) of this subsection for the purpose set forth in said subdivision, the corporation shall provide a detailed plan to the department, in a form and manner prescribed by the commissioner, which plan shall be reviewed and approved or denied by the commissioner not later than thirty days after the department receives such plan. Such plan shall include, at a minimum, the following information:

(A) The name and contact information for the business organization;

(B) The proposed date to commence shipment through such business organization;

(C) A detailed description of the specific tamper-evident packaging to be used, which description shall include the security features for such packaging;

(D) The additional security measures to be provided by the business organization during transport and at the point of delivery; and

(E) A description of the processes to be employed by the business organization in transporting the lottery tickets in the event a delivery is unsuccessful.

(3) The corporation shall retain a copy of all documentation created pursuant to subdivision (2) of this subsection for not less than three years. In the event the corporation is notified by a lottery sales agent that a package of lottery tickets appears to be damaged, missing or otherwise compromised at the time of delivery, the corporation shall immediately notify the department and shall provide instructions to the lottery sales agent to embargo the package until such time that the contents can be verified against the documentation retained by the corporation.

(d) No person or business organization, other than a shareholder in a publicly traded corporation, may be a contractor or a subcontractor for the provision of facilities, components, goods or services that are necessary for and directly related to the secure operation of the activities of the Connecticut Lottery Corporation, or may exercise control in or over a vendor licensee unless such person or business organization is licensed as an affiliate licensee by the commissioner. Each applicant for an affiliate license shall pay a nonrefundable application fee of two hundred fifty dollars.

(e) (1) Each employee of a vendor or affiliate licensee who has access to the facilities of the Connecticut Lottery Corporation and provides services in such facilities without supervision by said corporation or performs duties directly related to the activities of said corporation shall obtain an occupational license.

(2) Each officer, director, partner, trustee or owner of a business organization licensed as a vendor or affiliate licensee and any shareholder, executive, agent or other person connected with any vendor or affiliate licensee who, in the judgment of the commissioner, will exercise control in or over any such licensee shall obtain an occupational license.

(3) Each employee of the Connecticut Lottery Corporation shall obtain an occupational license.

(f) The commissioner shall issue occupational licenses in the following classes: (1) Class I for persons specified in subdivision (1) of subsection (e) of this section; (2) Class II for persons specified in subdivision (2) of subsection (e) of this section; (3) Class III for persons specified in subdivision (3) of subsection (e) of this section who, in the judgment of the commissioner, will not exercise authority over or direct the management and policies of the Connecticut Lottery Corporation; and (4) Class IV for persons specified in subdivision (3) of subsection (e) of this section who, in the judgment of the commissioner, will exercise authority over or direct the management and policies of the Connecticut Lottery Corporation. Each applicant for a Class I or III occupational license shall pay a nonrefundable application fee of twenty dollars. Each applicant for a Class II or IV occupational license shall pay a nonrefundable application fee of one hundred dollars. The nonrefundable application fee shall accompany the application for each such occupational license. Applicants for such licenses shall apply in a form and manner prescribed by the commissioner.

(g) Each applicant for a Class III or Class IV occupational license, and each employee of the corporation holding such a license on January 1, 2026, shall disclose, in a form and manner prescribed by the commissioner, the forms of gaming under this chapter and chapter 229b on which such applicant or such licensed employee will work as an employee of the corporation. For an applicant approved for a Class III or Class IV occupational license, or for an employee of the corporation who currently holds such a license, the commissioner may issue a separate endorsement authorizing such licensee to engage in the corporation's operation, under chapter 229b, of Internet games or retail sports wagering, as such terms are defined in section 12-850, and such employee shall not be required to apply for a license pursuant to section 12-858 or section 12-859 in order to engage in such operation. All Class III or Class IV occupational licensees shall report to the department any criminal conviction not later than two business days after the order or judgment of such conviction is rendered. The corporation and all Class III or Class IV occupational licensees shall immediately report to the department any change in the scope of employment of such licensee employed by the corporation that would require the employee to obtain an additional endorsement pursuant to this subsection.

(h) No person or business organization may be a lottery sales agent unless such person or organization is licensed as a lottery sales agent by the commissioner.

(i) In determining whether to grant a vendor, affiliate, lottery sales agent or occupational license to any such person or business organization, the commissioner may require an applicant to provide information as to such applicant and person in charge related to: (1) Financial standing and credit; (2) moral character; (3) criminal record, if any; (4) previous employment; (5) corporate, partnership or association affiliations; (6) ownership of personal assets; and (7) such other information as the commissioner deems pertinent to the issuance of such license, provided the submission of such other information will assure the integrity of the state lottery. The commissioner shall require each applicant for a vendor, affiliate, lottery sales agent or occupational license, provided if an applicant for a lottery sales agent is a business organization the commissioner shall require such entity's person in charge to submit to state and national criminal history records checks and may require each such applicant, or person in charge, to submit to an international criminal history records check before such license is issued. The state and national criminal history records checks required pursuant to this subsection shall be conducted in accordance with section 29-17a. The commissioner shall issue a vendor, affiliate, lottery sales agent or occupational license, as the case may be, to each applicant who satisfies the requirements of this subsection and who is deemed qualified by the commissioner.

(j) Each vendor, affiliate or Class I or II occupational license shall be effective for not more than one year from the date of issuance. Each Class III or IV occupational license shall remain in effect throughout the term of employment of any such employee holding such a license. The commissioner may require each employee issued a Class IV occupational license to submit information as to such employee's financial standing and credit annually. Initial application for and renewal of any such license shall be in such form and manner as the commissioner shall prescribe.

(k) (1) Upon petition of the corporation, a vendor licensee or an affiliate licensee, the department may authorize an applicant for an occupational license to provisionally perform the work permitted under the license applied for, if: (A) The applicant has filed a completed occupational license application in the form and manner required by the commissioner, and (B) the corporation, vendor licensee or affiliate licensee attests that the provisional authorization is necessary to continue the efficient operation of the lottery, and is based on circumstances that are extraordinary and not designed to circumvent the otherwise applicable licensing procedures.

(2) The department may issue a provisional authorization to an applicant for an occupational license in advance of issuance or denial of such license for a period not to exceed six months. Provisional authorization shall permit such applicant to perform the functions and require the applicant to comply with the requirements of the occupational license applied for as set forth in the provisions of this chapter and regulations adopted pursuant to this chapter. Provisional authorization shall not constitute approval for an occupational license. During the period of time that any provisional authorization is in effect, the applicant granted such authorization shall be subject to and comply with all applicable statutes and regulations. Any provisional authorization issued by the department shall expire immediately upon the earlier of: (A) The date of issuance of written notice from the department that the occupational license has been approved or denied, or (B) six months after the date the provisional authorization was issued.

(3) An individual whose occupational license application is denied after a period of provisional authorization shall not reapply for an occupational license for a period of one year from the date of the denial.

(4) An individual whose provisional authorization expires pursuant to subparagraph (B) of subdivision (2) of this subsection may apply for an additional provisional authorization. The department may issue such additional provisional authorization upon a determination that the conditions of subparagraph (B) of subdivision (1) of this subsection exist.

(l) When an incident occurs, or is reasonably suspected to have occurred, that causes a disruption in the operation, security, accuracy, integrity or availability of the lottery gaming system, the vendor licensed to provide such lottery gaming system shall, immediately upon discovery of such incident, but not later than twenty-four hours after discovery of such incident, provide the department with a written incident report including the details of the incident and the vendor's proposed corrections. Not later than five business days after notifying the department of an incident, the vendor licensee shall provide the department with a written incident report that (1) details the incident, including the root cause of the incident, and (2) outlines the vendor's plan to make corrections, mitigate the effects of the incident and prevent incidents of a similar nature from occurring in the future. If the vendor licensee is unable to determine the root cause and correct the incident within the initial five business days, the licensee shall continue to update the department every five business days with written incident reports until the root cause is determined and the incident is corrected. The department may require the vendor licensee to submit the lottery gaming system to a gaming laboratory for recertification.

(m) (1) After a hearing held in accordance with chapter 54, the commissioner may, for good cause, suspend, revoke, refuse to renew or place conditions on a vendor, affiliate, lottery sales agent or occupational license, deny an application for any such license or impose a civil penalty on a vendor, affiliate, lottery sales agent or occupational licensee for good cause, including, but not limited to: (A) Any failure to comply with the provisions of this chapter, chapter 226 or the regulations adopted pursuant to said chapters; (B) any conduct likely to mislead, deceive or defraud the public or the commissioner; (C) any provision of materially false or misleading information; (D) any criminal conviction or civil judgment involving fraud, theft or another financial crime; (E) any demonstrated insolvency, including, but not limited to, the filing of a bankruptcy petition or any failure to meet material financial obligations that directly impact the licensee's ability to operate in compliance with the provisions of this chapter and chapter 226; or (F) any failure to complete an application. The commissioner may order summary suspension of any such license in accordance with subsection (c) of section 4-182.

(2) Any such applicant aggrieved by the action of the commissioner concerning an application for a license, or any person or business organization whose license is suspended or revoked, may appeal pursuant to section 4-183.

(3) The commissioner may impose a civil penalty on any licensee for a violation of any provision of this chapter or any regulation adopted under section 12-568a in an amount not to exceed two thousand five hundred dollars per violation after a hearing held in accordance with chapter 54.

(4) No lottery sales agent shall keep any unauthorized gambling device, illegitimate lottery ticket or illegal bookmaking equipment, or allow any professional gambling, as defined in section 53-278a, at the lottery sales agent's retail facility. In the event the department finds any unauthorized gambling device, illegitimate lottery ticket, illegal bookmaking equipment or professional gambling at a lottery sales agent's retail facility, the lottery sales agent shall be fined not more than four thousand dollars per violation, and the commissioner shall issue a notice of violation to the lottery sales agent that (A) includes an order summarily suspending the lottery sales agent license the commissioner issued to the lottery sales agent, and (B) notifies the suspended lottery sales agent that the suspended lottery sales agent (i) is liable for the fine imposed pursuant to this subdivision, (ii) shall immediately cease all activity that requires a lottery sales agent license, and (iii) may, not later than fifteen days after the lottery sales agent receives such notice of violation, submit to the commissioner a written request that a hearing be held in accordance with the provisions of chapter 54 concerning such summary suspension and fine. If the suspended lottery sales agent requests a hearing within such fifteen-day period, the commissioner shall conduct a hearing in accordance with the provisions of chapter 54 concerning such summary suspension and fine. If the suspended lottery sales agent does not request a hearing within such fifteen-day period, the summary suspension order issued, and fine imposed, pursuant to this subdivision shall be deemed a final decision subject to appeal pursuant to section 4-183. A summary suspension order issued pursuant to this subdivision shall remain in effect until the summary suspension is lifted and all fines imposed pursuant to this subdivision have been paid. The summary suspension may be lifted by a written order issued by the commissioner or upon a final decision rendered after a hearing held in accordance with the provisions of chapter 54.

(n) The commissioner may require that the books and records of any vendor or affiliate licensee be maintained in any manner which the commissioner may deem best, and that any financial or other statements based on such books and records be prepared in accordance with generally accepted accounting principles in such form as the commissioner shall prescribe. The commissioner or a designee may visit, investigate and place expert accountants and such other persons as deemed necessary in the offices or places of business of any such licensee, or require that the books and records of any such licensee be provided to the department, for the purpose of satisfying the commissioner that such licensee is in compliance with the regulations adopted by the department.

(o) For the purposes of this section, (1) “business organization” means a partnership, incorporated or unincorporated association, firm, corporation, limited liability company, trust or other form of business or legal entity; (2) “control” means the power to exercise authority over or direct the management and policies of a licensee; and (3) “person” means any individual.

(p) The Commissioner of Consumer Protection may adopt such regulations, in accordance with chapter 54, as are necessary to implement the provisions of this section.